The indicators considered for the Ease of Doing Business report
Industry

Rwanda Moves to 29th on 2019 World Bank Doing Business Report

Rwanda has moved 11 places to the 29th position in the ease of doing business ranking, this according to the 2019 World Bank Doing Business report. The World Bank assessed 190 countries for the report released on October 31 2019.

While Mauritius comes in at number 20, in the East African bloc, Rwanda is the best performing country, followed by Kenya at number 61, Uganda 127, Tanzania 144, Burundi 168 and South Sudan in 185.

The best ranking country in the world is New Zealand while the last is Somalia.

Talking about the new position, Clare Akamanzi, the CEO Rwanda Development Board said:“We are pleased to have moved up 11 places to 29, from 41 in last year’s Doing Business report. Rwanda has adopted a very bold and ambitious approach to reforming its business environment and we will continue working on further improvements in keeping with our vision of a private sector-led economic transformation”.

Left to right: Rwanda Minister of Infrastructure Claver Gatete Rwanda Energy Group CEO Ron Weiss and World Bank Group Rwanda’s Country Manager Yasser El Gammal during the WB DB 2019 Report announcement in Kigali on October 31

Highlights of the report

  1. Rwanda is the only Low-Income Country (LIC) in the Top 30, and the only one in the Top 100. Nearly 75% of the Top 30 are High-Income Countries (HICs) with per annual per capita income above $12,000.
  2. Rwanda improved on all but one of the ten Doing Business indicators, with the biggest gains recorded in Getting Electricity (number 119 to number 68, a 29% gain in absolute terms) and Resolving Insolvency (number 79 to number 58, reflecting a 20% increase in the absolute score).
  3. Rwanda remains number 2 in the world for ease of registering property, and #3 in the world for quality of credit information systems and procedures.
  4. Rwanda improved its rank on ease of starting a business by replacing the electronic billing machine system with free software from the Rwanda Revenue Authority (RRA) that allows taxpayers to issue VAT invoices from any computer.
  5. In 2018, Rwanda also returns to the list of the Top 10 biggest reformers over the previous year. Since 2005, Rwanda’s consistent focus on business climate reform has produced the biggest cumulative improvement of all countries measured by Doing Business, rising from a low of 37.4/100 in 2005 (ranking worse than  number 150 globally), to 77.68/100 in 2018 (number 29).
  6. Some examples of what this means in real terms: (1) According to Doing Business data, it took 354 days on average to register property in Rwanda in 2005; in 2018 it takes an average of 7 days. (2) It cost the equivalent of 317% of annual per capita income to register a new business in 2005; it costs less than 15% in 2018.

Key regulatory areas

  • The 16thedition of the World Bank Doing Business Report measures ten business regulatory areas that are important to nascent and existing entrepreneurs. Rwanda implemented reforms in seven of the ten indicators and the biggest gains this year were recorded in:

Getting Electricity, where Rwanda improved from the 119th to 68th

Resolving Insolvency with improvement from the 79th rank to 58th

Rwanda remains 2nd globally for Ease of Registering Property, and 3rd in the world for Quality of Credit Information Systems and Procedures.

  • Three major reforms instituted in 2018 decreased bureaucracy in construction, ensured timely electricity provision for investors and reduced the amount of time exporters spend at customs.
  • In terms of Getting Electricity, Rwanda Energy Group (REG) introduced an online application facility for REG customers to apply for electricity connection and reduced the time to obtain electricity connection to 20 days, down from 34 days previously. REG also implemented an automated system to measure the duration and frequency of power outages to ensure better planning, maintenance and resource allocation with the overall aim of increasing the reliability of electricity supply.
  • To ease the challenges in the construction sector, Rwanda has introduced various reforms to reduce bureaucracy and costs in obtaining construction permits by implementing a risk-based approach.
  • Following the introduction of electronic online registration, domestic business registrations have increased from 418 in 2008 to 13,394 in 2017.
  • Modern secured transactions laws offering strong protections to secured creditors have increased confidence among lenders and expanded access to finance. The outcome of the reforms has seen mortgages registered increase from 770 in 2007 to 15,738 in 2017.
  • Simplified tax systems and regulatory reforms have increased tax compliance and resulted in higher tax revenues.

BY EDNA K MWESIGYE